Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
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Chapter 10, Problem 28P
a.
To determine
Assume that NGN is the functional currency then what will be the translation adjustment in 2017.
b.
To determine
What is the amount as translation adjustment where functional currency is US Dollar?
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Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 150,000 pesos that is sold on January 17, 2018, for 178,000 pesos. The subsidiary pays for the inventoryon January 31, 2018. Currency exchange rates are as follows:
November 1, 2017
$ .18 = 1 peso
December 31, 2017
.19 = 1
January 17, 2018
.20 = 1
January 31, 2018
.21 = 1
1. What amount does Newberry’s consolidated balance sheet report for this inventory at December 31, 2017?$28,500.$27,000.$30,000.$31,500.
2. What amount does Newberry’s consolidated income statement report for cost of goods sold for the year ending December 31, 2018?$27,000.$30,000.$28,500.$31,500.
Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 100,000 pesos that is sold on January 17, 2018, for 130,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows:
November 1, 2017 $0.16 = 1 peso
December 31, 2017 0.17 = 1
January 17, 2018 0.18 = 1
January 31, 2018 0.19 = 1
LO 8-2, 8-3
What amount does Newberry’s consolidated balance sheet report for this inventory at December 31, 2017?
$16,000.
$17,000.
$18,000.
$19,000.
Rolfe company (a US based company) has a subsidiary in Nigeria where the local currency unit is naira (NGN). On december 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands):
cash 16,750
Inventory 11,500
Lang 4,150
Building 41,500
Accumulate depreciation (20,750)
Note Payable 20,300
Common Stock 21,900
Retained Earnings 10,950
The subsidiary adquired the investory on Agust 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place:
Feb. 1 Paid 8,150,000 NGN on note payable
May 1 Sold entire inventory for 17,500,000 on account
June 1 Sold land for 6,150,000 cash
Aug. 1 collected all accounts receivable
Sept 1 signed long term note to receive 8,150,000 NGN cash
Oct 1 bought inventory for 20,150,000 NGN cash
Nov 1 Bought land for 3,150,000 NGN account
Dec 1 Declared and paid 3,150,000 NGN cash dividend to parent
Dec 31 Recorded depreciation for the entire year of 2,075,000 NGN
The US…
Chapter 10 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 10 - Prob. 1QCh. 10 - What causes balance sheet (or translation)...Ch. 10 - Prob. 3QCh. 10 - Prob. 4QCh. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - Prob. 9QCh. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Which translation method does U.S. GAAP require...Ch. 10 - Prob. 13QCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - What amount does Newberrys consolidated income...Ch. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Prob. 17PCh. 10 - A foreign subsidiarys functional currency is its...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - The following accounts are denominated in rubles...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Sullivans Island Company began operating a...Ch. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - The following account balances are for the Agee...Ch. 10 - Prob. 35PCh. 10 - Prob. 36PCh. 10 - Prob. 37PCh. 10 - Prob. 38PCh. 10 - Prob. 1DYSCh. 10 - RESEARCH CASE 2FOREIGN CURRENCY TRANSLATION...Ch. 10 - Prob. 3DYSCh. 10 - Prob. 4DYSCh. 10 - Prob. 5DYS
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